Geithner EU Regulations

Geithner Criticizes European Union Hedge Fund Regulations

U.S. officials have questioned the European Union's plans to regulate hedge funds. Although Britain is pushing to soften the EU proposal, U.S. Treasury Secretary Timothy Geithner still expressed his U.S. concerns in a letter stating, "We are concerned with various proposals that would discriminate against U.S. firms and deny them access to EU markets that they currently have." Here is a copy of his letter about European Union's hedge fund regulations.

The letter noted that the U.S. approach to regulation maintained full access for EU fund managers to the U.S. market.

European officials denied the proposed law is discriminatory and said it was in keeping with agreements made by the Group of 20 leading economies. "The new hedge fund rules do not discriminate against foreign players and are not protectionist," said Amadeu Altafaj, a spokesman for the commission. Marine de Carné, spokeswoman for the French delegation to the EU, said some EU governments "were quite surprised to hear that accusation of protectionism." (The U.S. letter didn't use the words "protectionist" or "protectionism.")

France has been a strong advocate for the version of the draft law that worries Mr. Geithner. It and other governments have reacted strongly to losses suffered by European investors in funds operated by Bernard Madoff, in particular.

The aim of the proposal was "to protect the investors and the people that suffered from the crisis," Ms. De Carné said. It wasn't discriminatory because once a fund manager had met the European standard, it would have a passport to the whole EU. Source

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